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Bored with Blockchain? Take a Closer Look

Right about now, blockchain technology might seem like the Wizard in Oz: lots of flash, difficult to understand, and slightly overrated – to put it mildly. Sure, it’s an amazing bit of progress with the potential to change operational processes across many industries – automotive included. It’s even likely that blockchain will end up being the backbone to a solution (car history, for example) that transforms the auto sector.

If you think that sounds like hyperbole, think again. Blockchain came to fame because it’s the real story behind cryptocurrency: Bitcoin without the blockchain is just play money. The technology creates and stores Bitcoin currency valuation with complete decentralized transparency and stability. You can’t delete or change someone’s record, you can only add one, as such blockchain is the ultimate Google Docs – practical, useful and locked down.

Pie in the Sky or Real World?

That all sounds great. And it’s getting easier to see how this technology can be implemented to change automotive retail. In fact, the real question has become: How will dealerships be able to operate in a sharing, on-demand and subscription-style economy without employing some type of blockchain?

Simply put, as dealerships adjust to multiple and incremental revenue streams (ride share, subscription, etc.), ledger-based technology becomes a required part of data management, assessment and monetization. Car and market data analysis based on blockchain technology shows the entire picture of a vehicle’s use, helping to fine-tune marketing campaigns, retail events…pricing…you get the picture.

Still, it’s hard to see how all that changes the fundamental way vehicles are bought and sold, either today or in the realistic and plannable future. And there doesn’t seem to be much progress made towards the vendor synergy, something required for blockchain to work.

In the auto sector, blockchain is still more thought leadership than sales management; it’s easy to apply the value of the technology to supply chain dynamics, for example. You can envision tangible solutions, but it’s entirely different and more difficult to see how this “super ledger” technology can legitimately help dealers improve profit, sell more cars, or even just streamline operations.  

Inspiration and Perspiration

There are plenty of ideas floating around out there about blockchain. And knowing about them will definitely make you a clever, edgy professional at upcoming sales and service conferences. The problem with ideas, though, is that they only become the next big thing when someone applies a little perspiration to the inspiration. And when it comes to blockchain, actionable ideas for the auto retail space are just now emerging. As they do, however, the technology will force fundamental changes to dealership revenue streams and operations; it will also force collaboration and cooperation between vendors.

Here are three very relevant startups that are working to apply blockchain technology to ideas that move the metal when it comes to dealership business:

Vehicle History: CarVertical is a European startup actively developing a blockchain-based solution that aggregates all historical vehicle data, improving transparency, accuracy, and stabilizing valuations. All data in the blockchain registry is immutable, transparent, and publicly accessible. Based on this foundation, the company is working on a number of products: A mobile “Wallet” that manages your car’s registration, maintenance and insurance records; a consumer report that provides full car history; and white label products along with an API for businesses.

Ride and Car Sharing: Oaken Innovations is working with the Toyota Research Institute and other companies to create what they call a “truly open mobility ecosystem” between technology companies and automakers. This happens via blockchain and open source technologies, and hastens the day of autonomous driving, and peer-to-peer ride/car sharing. As this work gets closer to reality, it perhaps becomes a way for dealerships to create local ride-sharing services with their aged inventory, extracting revenue before selling the car or dropping the price to move off the lot.

Parts and Service: CarFix, through their Vehicle Lifecycle Blockchain (VLB) token, is at work implementing a solution that establishes fixed prices for all vehicle repairs. It already has an ecosystem of more than 500 repair shops, 10 of the largest spare parts distributors, major dealerships and more than 250,000 users.

These are just three relevant examples of active work that will impact the dealership business model. It’s impossible to look into my crystal ball to say if any of these will be among those solutions that end up sticking and disrupting business as usual. But the point is that all the perspiration they’re adding to the inspiration of blockchain will one day create the next big thing that dealerships will adopt to improve the way they sell and service cars.

Pete MacInnis
Pete MacInnis
Pete brings 40 years of experience in automotive finance and technology to his role as Founder and CEO of eLEND Solutions™.   Founded in 2003 as DealerCentric®, eLEND Solutions™ is a privately held automotive FinTech company focused on deal generation solutions for the retail automotive industry.  The platform specializes in digital credit, identity, and finance solutions for remote and in-store shoppers - designed to accelerate conversions of digital end-to-end purchase experiences - concluding with a fundable, transactable deal structure. Pete began his career with WFS Financial where he spent 14 years in various management positions that helped grow the company to over $4 billion serviced.  Pete left WFS and co-founded auto finance company Onyx Acceptance in 1993. Onyx originated over $14 billion in auto loans, went public in 1996 and was acquired by Capital One in 2005. 

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